KEYWORD: Guideline E
DIGEST: In answer to interrogatories, Applicant swore to the accuracy of a previous statement
subject to attached comments.  His counsel stipulated to admission of the exhibit.  The Judge’s
decision to give the exhibit no weight was unreasonable.  The Judge’s failure to apply two
disqualifying conditions and his whole person analysis are not sustainable given record evidence
of: shoplifting, UCMJ punishment, a false statement to an investigator, and Applicant’s
resignation from a job following allegations of misconduct.  Favorable decision reversed.
CASENO: 09-06218.a1
DATE: 09/06/2011
DATE: September 6, 2011
In Re:
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Applicant for Security Clearance
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ISCR Case No. 09-06218
APPEAL BOARD DECISION
APPEARANCES
FOR GOVERNMENT
Melvin A. Howry, Esq., Department Counsel
FOR APPLICANT
John N. Griffith, Esq.
110 U.S.C. § 815.  
2
The Defense Office of Hearings and Appeals (DOHA) declined to grant Applicant a security
clearance.  On July 17, 2010, DOHA issued a statement of reasons (SOR) advising Applicant of the
basis for that decision–security concerns raised under Guideline E (Personal Conduct) of
Department of Defense Directive 5220.6 (Jan. 2, 1992, as amended) (Directive).  Applicant
requested a hearing.  On May 13, 2011, after the hearing, Administrative Judge Robert Robinson
Gales granted Applicant’s request for a security clearance.  Department Counsel appealed pursuant
to Directive ¶¶  E3.1.28 and E3.1.30.
Department Counsel raised the following issues on appeal: whether the Judge erred in some
of his findings of fact and whether the Judge failed to consider the totality of Applicant’s conduct
in performing his analyses of the SOR allegations.  Consistent with the following, we reverse the
Judge’s decision.
Facts
The Judge made the following pertinent findings of fact: Applicant is an account manager
in business development for a Defense contractor.  He served in the U.S. Navy from 1980 until his
retirement in 2001.  Applicant is married with two children.
In March 1995, Applicant received a Top Secret security clearance.  At some point thereafter
he was granted access to Sensitive Compartmented Information (SCI). 
In March 2000, Applicant, a commander (0-5), shoplifted items from a Base Exchange.  He
was apprehended by  members of the security forces squadron after a review of a video surveillance
tape.  He received nonjudicial punishment under Article 15 of the Uniform Code of Military Justice.1
The specifications were two offenses of larceny and two of conduct unbecoming an officer.
Applicant attributed his actions to the effects of prescribed pain medication.  His punishment
consisted of a punitive letter of reprimand and forfeiture of one-half of his pay per month for two
months.  
Applicant’s security clearance was suspended in April 2000, and his access to SCI was
suspended in May 2000.  On January 12, 2001, the command recommended Applicant’s security
clearance be revoked.  On May 29, 2001, security authorities for the Navy issued a Letter of Intent
(LOI) to revoke Applicant’s clearance and his access to SCI.  
Because Applicant lost his clearance eligibility, the Navy processed him for retirement based
on his failure to maintain professional standards.  His retirement was effective in July 2001.  His DD
Form 214, Discharge Certificate, lists “unacceptable conduct” as the reason for separation.
2Applicant testified that he began his terminal leave in January 2001, nearly six months prior to his retirement
date.  Tr. at 78.  He testified that DoD policy permitted accrual of such an amount of leave by persons on extended
deployments, etc.  “Q: And so for six years you didn’t take any leave?  A: For–actually it was longer than that.  The
answer is yes and no.”  Tr. at 78-79.  Applicant’s testimony on this matter is not consistent with his own Exhibit N, an
extract from DoD Instruction 1327.06, which permits members in hostile fire zones, imminent danger areas, and “certain
deployable ships” to accrue leave in excess of normal limits.  However, the Instruction, which is dated June 16, 2009,
limits the total accrual to 120 days, less than that to which Applicant testified that he had been entitled.   
3The Judge cites to Government Exhibit (GE) 7, Answers to Interrogatories.  See discussion below.  
4Department Counsel has not challenged this finding on appeal. 
3
Applicant contends that he never saw the May 29, 2001, LOI because he was on terminal leave at
the time it was issued.2
While on terminal leave, Applicant went to work for a Government contractor.  He resigned
in March 2008 in lieu of termination for inflating expense reports.  On his 2009 security clearance
application (SCA), he stated that he had 
[l]eft job by mutual agreement following allegations of misconduct.  There were
allegations of a violation of a corporate policy.  While there was a significant amount
of blame to go around and heavy tension related to office politics, in the end, I was
the one ultimately responsible.  Rather than spend the time fighting the allegations
only to return to the same office politics . . . I elected to retire.  Decision at 5-6.  
Applicant’s former employer conducted an investigation into Applicant’s 2007 travel
expenses ($26,017) and 2008 travel expenses ($13,867). A Report of Adverse Information prepared
by the facility security officer stated “Applicant was terminated from employment with the
Corporation, but it looks as though it was allowed to go through as a ‘resignation.’  Very simply,
[Applicant] was terminated due to inflating expense reports.”  Decision at 6.  Former colleagues of
Applicant characterized his supervisors as manipulative, devious, and concerned about their own
power; opined that his problems were due to a difference of opinion between Applicant and an off-
site superior; and opined that Applicant was a victim of office politics.
In July 2000, Applicant was interviewed by an investigator.  “An incomplete extract of the
unsworn and unsigned document which appears to be a report of investigation (ROI) states that
Applicant “denied any involvement with Law Enforcement or any Criminal Activities since June
82[.]”3      
 In March 2009, when completing his SF 86, he responded “no” to a question which asked
if he had ever had a clearance of access authorization denied, suspended, or revoked.  The SOR
alleges that he deliberately failed to disclose that his access to SCI was suspended in April 2000.
Applicant denies that he intended to falsify or to omit material information.  He states that he was
only aware that his SCI access was not being renewed.4
4
Discussion
A Judge is required to “examine the relevant data and articulate a satisfactory explanation
for” the decision, “including a ‘rational connection between the facts found and the choice made.’”
Motor Vehicle Mfrs. Ass’n of the United States v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43
(1983)(quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).  “The
general standard is that a clearance may be granted only when ‘clearly consistent with the interests
of the national security.’” Department of the Navy v. Egan, 484 U.S. 518, 528 (1988).  “Any doubt
concerning personnel being considered for access to classified information will be resolved in favor
of the national security.”  Directive, Enclosure 2 ¶ 2(b).  The Appeal Board may reverse the Judge’s
decision to grant, deny, or revoke a security clearance if it is arbitrary, capricious, or contrary to law.
Directive ¶¶ E3.1.32.3 and E3.1.33.3.  
Once a concern arises regarding an Applicant’s security clearance eligibility, there is a strong
presumption against the grant or maintenance of a security clearance.  See Dorfmont v. Brown, 913
F. 2d 1399, 1401 (9th Cir. 1990), cert. denied, 499 U.S. 905 (1991).  After the Government presents
evidence raising security concerns, the burden shifts to the applicant to rebut or mitigate those
concerns.  See Directive ¶ E3.1.15.  “The application of disqualifying and mitigating conditions and
whole person factors does not turn simply on a finding that one or more of them apply to the
particular facts of a case.  Rather, their application requires the exercise of sound discretion in light
of the record evidence as a whole.”  See, e.g., ISCR Case No. 05-03635 at 3 (App. Bd. Dec. 20,
2006).
In deciding whether the Judge's rulings or conclusions are arbitrary or capricious, the Board
will review the Judge's decision to determine whether:  it does not examine relevant evidence; it fails
to articulate a satisfactory explanation for its conclusions, including a rational connection between
the facts found and the choice made; it does not consider relevant factors; it reflects a clear error of
judgment; it fails to consider an important aspect of the case; it offers an explanation for the decision
that runs contrary to the record evidence; or it is so implausible that it cannot be ascribed to a mere
difference of opinion.  In deciding whether the Judge's rulings or conclusions are contrary to law,
the Board will consider whether they are contrary to provisions of Executive Order 10865, the
Directive, or other applicable federal law.  See ISCR Case No. 03-22861 at 2-3 (App. Bd. Jun. 2,
2006)
Department Counsel challenges the Judge’s finding that Applicant did not deliberately
provide false information during the security clearance process.  He also contends that the Judge
5Directive, Enclosure 2 ¶ 16(c) : “credible adverse information in several adjudicative issue areas that is not
sufficient for an adverse determination under any other single guideline, but which, when considered as a whole, supports
a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of candor, unwillingness to
comply with rules and regulations, or other characteristics indicating that the person may not properly safeguard
protected information[.]”    
6Directive, Enclosure 2 ¶ 16(d): “credible adverse information that is not explicitly covered under any other
guideline and may not be sufficient by itself for an adverse determination, but which, when combined with all available
information supports a whole-person assessment of questionable judgment, untrustworthiness, unreliability, lack of
candor, unwillingness to comply with rules and regulations, or other characteristics indicating that the person may not
properly safe guard protected information This includes but is not limited to . . . (3) a pattern of dishonesty or rule
violations; (4) evidence of significant misuse of Government or other employer’s time or resources[.] ”    
7The Federal Rules of Evidence serve as a guide in DOHA proceedings.  Directive ¶ E3.1.19.  See Fed. Rule
Evid. 801(d)(2) for the proposition that a statement by a party, or a statement of which a party has manifested an
adoption, is excluded from the definition of hearsay when offered by a party opponent.  See also ISCR Case No. 08-
5
erred in not applying two Guideline E disqualifying conditions (DC), 16(c)5 and 16(d).6  Department
Counsel argues that the Judge’s failure to raise these disqualifying conditions resulted in an  analysis
that did not consider Applicant’s security-significant conduct as a whole.  In making this argument,
Department Counsel contends that the Judge’s whole-person analysis was in error.
Concerning the Judge’s conclusion that Applicant did not attempt deliberately to mislead the
Government, we note that proof of a false statement, standing alone, does not prove an applicant’s
state of mind.  When, as here, an applicant denies an intent to mislead or deceive, the Government
must present substantial evidence that the false statement or the omission was deliberate.
Substantial evidence means “such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion in light of all the contrary evidence in the same record.”  Directive ¶
E3.1.32.1. See ISCR Case No. 08-05637 at 2 (Sep. 9, 2010).         
In this case, the Judge concluded that the record did not contain sufficient evidence to
explain who conducted the 2000 interview and that the actual substance of Applicant’s answers
could not be ascertained beyond mere speculation.  He stated that the document in question appeared
to  violate the provisions of Directive ¶ E3.1.20, which forbids admission into DOHA proceedings
of a DoD ROI that is not authenticated.  He also concluded that the document did not meet the
requirements of ¶ E3.1.22, which delineates circumstances when certain adverse statements can be
admitted without affording a right of cross-examination.  He stated that he could not give the
document substantial weight.  Decision at 11-12.
Applicant’s answers to DOHA interrogatories, GE 7, contain an excerpt from a summary of
the subject interview conducted with Applicant on July 12, 2000.  This excerpt includes Applicant’s
denial of involvement with law enforcement personnel.  While this document does appear to be part
of a DoD ROI, Applicant swore to its accuracy, subject to comments which he had attached.
Applicant’s certification bears his notarized signature.  Therefore, the interview statement in
question has been incorporated into a statement by Applicant, evidence that is admissible in DOHA
proceedings.7  Applicant’s counsel stipulated to the admission of this exhibit.  In light of the Judge’s
01075 at 4 (App. Bd. Jul. 26, 2011).  This case addressed the admissibility of a summary of an applicant’s security
clearance interview.  “It is true that [the summary] does not contain the actual questions posed or Applicant’s verbatim
answers; however, it was signed by Applicant, who swore to its truthfulness, with certain factual corrections on unrelated
matters.  As such, [the summary] became the equivalent of an admission by Applicant, and the Judge erred in not
evaluating it as such.”  
8See GE 6 at Answer 5: Applicant related a conversation in which Navy lawyers discussed “what constituted
Law Enforcement and was base exchange security considered Law Enforcement, etc.”
9See Tr. at 55-57.: “Q: Now, for the expense reports–and did you inflate expense reports?  A: No.  The answer
is yes and no.  Never intentionally . . . I would have a business dinner with a customer and I would categorize that under
‘Business meeting.’  And my immediate superior didn’t like that . . . and he thought that should be over under ‘Personal
meals.’”  Compare with GE 4, documentation from Applicant’s former employer regarding his resignation.  This exhibit
includes an e-mail transmission from an official of the company containing the following: “I followed up with
appropriate Corporate staff functions to outline the actions we took in the wake of [Applicant’s] departure from
[Employer].  Corporate Ethics, Human Resources (HR), and Corporate Business Development (CBD) worked with
Corporate Legal, Corporate Security, and Corporate Finance in the disposition of [Applicant’s] case . . .  1.  Did we fix
the problem?  We have taken active steps to place in an unallowable accounting category all of [Applicant’s] 2008 travel
and related expenses of $13,867.  In addition we have taken active steps to place an equivalent amount of the [named
city] field office’s expenses in an allowable accounting category to offset $26,017 of [Applicant’s] 2007 travel expenses
that correspond to the time period covered by the investigation[.]”      
6
erroneous characterization of this evidence, his conclusion that he could not extend substantial
weight to it was unreasonable.    
Although Applicant stated in his comments that he did not remember the interview, he did
not deny that it occurred, nor did he deny actually making the challenged statement.  His comments,
admittedly somewhat rambling, state that the interview occurred a long time ago, that at the time of
the interview his nonjudicial punishment action was ongoing and that “nothing was on record,” and
that he did not intend to deceive.  In GE 6, another set of interrogatories, Applicant also implied
some confusion as to the meaning of the term “law enforcement” as it applied to Base Exchange
personnel.8  Given the Judge’s findings and record evidence that Applicant was a college educated
commander in the U.S. Navy who was undergoing UCMJ action for theft at the time of the interview
in question, it is unreasonable to conclude that his denial of criminal activity was honestly mistaken.
The record as a whole demonstrates that the Government presented substantial evidence of a
deliberately false statement.  The record does not support the Judge’s conclusion to the contrary. 
Regarding Department Counsel’s issue regarding DC 16(c) and 16(d), we note record
evidence of (1) Applicant’s having shoplifted from a Base Exchange, with the result that he was
punished under the UCMJ and retired for “unacceptable conduct;” (2) Applicant’s access to SCI
having been suspended following this shoplifting incident; (3) Applicant’s false statement to an
investigator concerning this matter; and (4) Applicant’s having resigned from a job following
allegations of misconduct.  On this last point, Applicant did not deny that his expense accounts were
inaccurate; rather he only denied that he had intended to defraud his employer.9  We find Department
Counsel’s argument persuasive that the evidence in the case establishes Guideline E security
concerns under DC 16(c) and 16(d).  Taken together the evidence supports a conclusion that
Applicant lacks the requisite judgment, trustworthiness, reliability, and willingness to comply with
10The Judge’s analysis did not address the inherent probability of Applicant’s contention that his shoplifting
and his misstatements on his expense accounts were both simple mistakes.  Nor did the Judge’s analysis of mitigation
address the inconsistency between Applicant’s testimony (that he thought he was only to go back seven years in
answering his 2009 SCA question as to whether he had ever had a clearance suspended or revoked, Tr. at 90) and his
other testimony and evidence (that he did not know that his SCI access had been suspended).     
7
rules and regulations.  Given the record that was before him, the Judge’s failure to apply these
disqualifying conditions was error.  
For similar reasons, we find Department Counsel’s challenge to the Judge’s whole-person
analysis to be persuasive.  Applicant’s most recent incident, the 2008 job loss due to his inflated
expense account, viewed in light of his prior shoplifting and false statement, undermines the Judge’s
conclusion that Applicant has mitigated the Guideline E security concerns arising in his case.10  The
record supports Department Counsel’s statement in his appeal brief that the evidence “compels an
unfavorable whole-person conclusion because Applicant has repeatedly exhibited poor judgment,
all in the context of his actions while in the workplace or during the security clearance process.”
The Judge’s decision fails to consider relevant factors and offers an explanation for the decision that
runs contrary to the weight of the record evidence.  See ISCR Case No. 03-22861 at 2-3, supra.
Accordingly, we conclude that the appropriate course of action is to reverse.  
Order
The Judge’s favorable security clearance decision is REVERSED.
  
Signed: Michael Y. Ra’anan         
Michael Y. Ra’anan
Administrative Judge
Chairperson, Appeal Board
Signed: Jean E. Smallin                  
Jean E. Smallin 
Administrative Judge
Member, Appeal Board
8
Signed: James E. Moody                 
James E. Moody
Administrative Judge
Member, Appeal Board